FAC Explorer

Finding 10446 (2023-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-01-29
Audit: 14113
Organization: McSherrystown Interfaith Housing Corporation (PA)
Auditor: Hamilton & Musser PC

AI Summary

  • Core Issue: Escrow accounts were not accurately reconciled, leading to overstated balances.
  • Impacted Requirements: Compliance with HUD regulations for maintaining and reconciling reserve accounts.
  • Recommended Follow-Up: Implement monthly adjustments and record escrow activity to ensure accurate reconciliations moving forward.

Finding Text

Significant Deficiency – Reconciliation of Escrow Accounts Mortgage Insurance Rental Housing, ALN #14.134 Criteria The U.S. Department of Housing and Urban Development (HUD) Chapter 3 HUD Multifamily Housing Program states owners shall establish a reserve for replacement account and make deposits in accordance with HUD requirements, usually a regulatory agreement and disbursements from the reserve for replacement fund may be made only after a written consent is received from HUD. Condition During the course of the audit, it was noted that the escrow accounts were not being accurately reconciled during the year. Cause The cause is due to monthly escrow amounts that were missing. Effect The effect was the escrow accounts were overstated. Questioned Costs None Perspective Information None Identification as a repeat finding There was no similar finding in the prior year. Recommendation We recommend that McSherrystown Interfaith Housing Corporation make an entry to record escrow activity during the year and implement similar monthly adjustments going forward. View of responsible officials and planned corrective action We agree that this compliance requirement is listed in the compliance supplement. We will implement additional procedures to capture escrow activity during the year. Additional training has been provided to the Accounting staff.

Corrective Action Plan

McSherrystown Interfaith Housing Corporation 40 E. High Street, Gettysburg, PA 17325 Phone (717) 334-1518 • Fax (717) 334-8326 TDD/TTY Relay Service: 1-800-654-5984 www.adamscha.org CORRECTIVE ACTION PLAN December 28, 2023 McSherrystown Interfaith Housing Corporation respectfully submits the following corrective action plan for the year ended September 30, 2023. Cognizant or Oversight Agency for Audit: Mortgage Insurance Rental Housing, ALN #14.134 Name and address of independent public accounting firm: Hamilton & Musser, PC 176 Cumberland Parkway Mechanicsburg, PA 17055 Audit Period: October 1, 2022 - September 30, 2023 The finding from the September 30, 2023 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. Findings - Financial Statement Audit: None Findings and Questioned Costs - Major Federal Award Programs Audit: #2023-001 - Significant Deficiency-Reconciliation of Escrow Accounts Mortgage Insurance Rental Housing, ALN #14.134 Recommendation We recommend that McSherrystown Interfaith Housing Corporation make an entry to record escrow activity during the year and implement similar monthly adjustments going forward. View of responsible officials and planned corrective action We agree that this compliance requirement is listed in the compliance supplement. We will implement additional procedures to capture escrow activity during the year. Additional training has been provided to the Accounting staff. If the U.S. Department of Housing and Urban Development has questions regarding this plan, please call McSherrystown Interfaith Housing Corporation Executive Director, Stephanie McIIwee at (717) 334-1518.

Categories

HUD Housing Programs Significant Deficiency

Other Findings in this Audit

  • 586888 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.134 Mortgage Insurance_rental Housing $3.13M
14.182 Section 8 New Construction and Substantial Rehabilitation $662,409